Comcast Corp may withdraw from the bidding for the MediaOne Group, following talks with AT&T that could lead to cable system swapping agreements, the LA Times reported yesterday. AT&T is said to have discussed compensation with Comcast if it agrees to withdraw its bid. Comcast has until Thursday to make a counterbid, after AT&T trumped its initial $60bn offer with a $62.5bn bid two weeks ago. The MediaOne board accepted the AT&T offer on Saturday.
Comcast has been looking for support from technology companies such as Microsoft Corp and America Online Inc to back up its bid for MediaOne, the fourth largest cable operator in the US. Microsoft, which already owns a $1bn stake of Comcast and $213m of MediaOne’s RoadRunner high speed networking arm, has been cited as the most likely partner. According to the LA Times report, Microsoft might also win concessions from AT&T if it agrees not to fight the bid. AT&T could agree to expand its existing agreement to use Microsoft operating systems in its set top boxes, the report said.
Separately, AT&T said it would buy the remaining 50% stake in Lenfest Communications Corp for $2.2bn in stock. Lemfest has 1.5m cable subscribers in the Philadelphia area.
